Six figure jobs
The Seek job search website has (finally) followed TradeMe’s lead and now have a ‘jobs paying over $100k‘ category . This is said to be in response to the large increase in the number of positions attracting those salaries, although all the numbers I can find quoted are only percentages, so it can be a bit tricky checking the real picture.
The largest slice of the currently advertised positions are in their IT category {148/3152}, followed by Engineering {359/3152} in quite a distant second, with accounting (285/3152) also placing. In comparison TradeMe are currently listing 554 IT jobs, out of 1332 in total with a $100k+ salary.
Now, the real picture is a bit smaller than this. We’ve mentioned before about potential overlap in advertising for ‘the job I’m leaving and the job I’m going to’ distorting the apparent figures. Also, some positions have multiple different advertising slants. The difference between a consultant, architect or IT specialist can sometimes be nothing beyond the advertised job title. So agencies try different headlines hoping to catch your eye. So don’t be surprised to find the same job description for a wide variety of different job titles.
Plus numerous positions are being advertised with multiple agencies, so it can pay to dig around and pick which agency to apply through if you fancy one of these positions. Often you will find that the actual recruiting company is also advertising the same role via Seek or TradeMe.
While the agencies will of course tell you that you stand a much better chance applying through them, experience shows few agents actually add value (there’s a shock!). The ones that will are normally the agents who have worked with you previously – perhaps in placing you in your current role. When it comes to interviews, the recruiting agencies should be able to help you out with the nuances of who is interviewing you, company values etc. more than a simple perusal of the companies website. Set against that, good personal networks should be able to give you better information.
At the end of the day if you apply directly, it can mean that the hiring company saves $20k+ in ‘recruitment’ costs. Money that would otherwise be paid to the agency as a success fee. There’s certainly a few decisions, which while they’ve not only rested on that factor, have certainly swung in the direction of a direct applicant rather than a recruitment agency referral because it saves that $20k.
(Don’t expect of course that you will be seeing the $20k!)
Employee goal setting…
Really gave me a good laugh this morning. I am thinking maybe I should set some work goals for Hubby, on which would be determined whether or not I pay him a bonus.
I wonder how well that would go down?
Yes – you do have to pay yourself a fair wage.
The supreme court has now decided that self employed people like us cannot use trusts and various business structures to artificially lower our salaries and thus pay less tax. Not that we have ever done that - we always seem to end up with scrupulously above-board accountants who insist in keeping us on the right side of the tax man. On the one hand that can sometimes be a bit annoying as we watch other people making claims that we are denied. On the other hand we can sleep easy knowing that in the event of a tax audit we have nothing to worry about.
I have seen the devastation that can be caused by bad accounting advise leading to a massive tax bill you can’t pay, and I never want to be in that position.
So what has the court decided?
..the Supreme Court has ruled that company and trust structures cannot be used to artificially reduce taxable income from “personal exertion” – a catch-all definition for the work that professionals and small businesspeople do.
So really – nothing different that what we already do. Hubby “earns” the money that comes into our business – so he gets paid the majority of that as a beneficiary income. A good portion is already taken up with business expenses, so he doesn’t get all of it, and i get a small amount for the bookkeeping work I do. Really I should get paid more, but right now the business is still growing, so we are retaining funds.
The decision was the latest in a string of court victories for the Inland Revenue Department, which are significantly recasting the legal and accounting professions’ understanding of what constitutes tax avoidance.
So even though in this case, we aren’t going to end up in the crap, the IRD are tightening up all over the place. This is where it pays to have a good but cautious accountant. While I hate paying more tax that I need to, paying less than I need to is just too big a headache to contemplate.
”The decision is helpful in pointing to some cases where avoidance would not be involved, such as the need to retain funds to make capital expenditure or where the company is experiencing financial difficulties or it would be imprudent to pay a market salary.
“As a practical matter it will be necessary for Inland Revenue to issue further guidance along these lines because it is in everyone’s interests for there to be reasonable certainty as to where the boundaries lie,” he said.
I should say so. We do seem to have a huge issue at the moment with the IRD not having to stick to it’s own understandings of the rules. There is no hard and fast rule, and the IRD have a massive amount of power (and unlimited funds) to use the courts to enforce a ruling. Even if they have previously written to you and advised you differently.
Tax – not for the fainthearted!
Over 1,320 jobs paying over $100,000 in New Zealand
Back in May 2009 (jeeze I’ve been blogging too long!) I posted about the fact that there were 735 jobs listed on Trade Me with salaries quoted over $100,000. That number has nearly doubled.
Now there’s actually 10,355 jobs currently listed on TM, which means that the proportion of high paying jobs is actually down ever so slightly from 14% to 12.7%. But IT and then Engineering are still the most likely jobs to get you the bigger bucks. The proportion of High Paid IT jobs in Wellington is also down slightly – at 36% of the total IT market.
And it should be remembered that just because a company in New Zealand lists a job as paying over $100,000 it does not mean that this is the salary they will end up wanting to pay you. So just be wary.
Why exactly should interest rates have to go up?
I just do not get this. There was a piece on the news last night about the large and rapid increase in the cost of living over the past year. This means inflation goes up (which just tracks how much prices have risen). Which means that interest rates should go up. Because that will apparently curb our spending and bring the rate of inflation down.
Except that the costs that are going up are food, power and petrol, as well as the luxuries. (A flat white will often now cost $4.50 whereas you used to be able to get one for $3.50 or even $3 even a year ago.)
Petrol went up by 20 per cent, food by 7 per cent and electricity by 7.8 per cent as the consumer price index rose 5.3 per cent in the year to June 30, the biggest rise since 1990.
The figure includes last year’s rise in GST but, even without it, inflation would still have been 3.3 per cent, above the Reserve Bank’s 1 per cent to 3 per cent target.
Now economists believe there is a 70 per cent chance of a rise in mortgage rates before December to try to curb inflation.
So why would you increase interest rates, putting up the cost of the mortgage, in order to give people even less money to put petrol in the car to get to work and earn the money they need to pay for the mortgage?
Why would you give them less money to put food on the table?
Why would you give them less money to heat their homes?
Because news reports are also saying that money is not being spent in retail stores. In fact an article in the Dom Post this morning actually bemoans that even the Kirkaldie and Staines winter sale is a bit of a damp squib – as opposed to the usual “queuing round the block” grand event.
And of course all of this goes hand in hand with little or no pay rises for the majority of people.
I can only hope that someone at the Reserve Bank of NZ can tell the somewhat obvious difference between inflation caused by people racking up credit to buy stuff they don’t need, and inflation caused by the basics rocketing up in price. It seems a bit obvious to me, but then I am not an economist.
Do you have to pay yourself a “fair” wage?
This is a question for the self employed – and is going to be answered one way another through a supreme court case.
Hearings on the appeal by Christchurch orthopaedic surgeons Ian Penny and Gary Hooper concluded in the Supreme Court in Wellington this afternoon. The pair argue their decision to re-route income through companies and family trusts was not a tax avoidance arrangement.
In doing so, they cut their personal incomes by as much as 80 per cent from levels prevailing before the top personal tax rate rose to 39 per cent in April 2000.
While the surgeons admit these were not “commercially realistic” salaries, they contend there is no such concept in the Income Tax Act and cannot be ruled to be avoidance.
Basically – they used to earn about $500-$600,000 a year, but once they set up the structures, they “earned” about $120,000 a year, and used the structures to “pay” other family members.
Which is basically what myself and hubby do – with one major difference: we were advised that income tax law states that the sharing of income must be realistic, and in proportion to the amount of effort each of us puts towards earning the money. Which means that I cannot be paid the same as hubby, and it is his effort that earns the money.
That doesnt mean I cant get a share of it – but it has to be comensurate with the effect my work has. Now I actually do a fair number of hours each week on Hubby’s behalf – so I get a “token” salary – and overall we do pay less personal income tax because of it.
But hubby still earns personally the same amount per month that he did while working at IBM – so we know it is a fair salary for the work he is doing. And thus we wont get into lots of trouble with the tax man!
I have met many people who believe you can simply split income – with no thought to doing so with reasonbale care – it’s a bit of a Kiwi Urban Myth. I guess the outcome of this case will tell us one way or another. Could be interesting.
And I could be getting a pay rise.
Trade Me Salary Guide Oct – Dec 10 is out now.
Once again, Trade Me have come out with a salary survey – which may be of some help when looking at planning a move here. As usual – you do need to understand that this is a very blunt instrument, and you cant really rely on the figures as such:
Trade Me Jobs listing data, full time roles, Oct-Dec 2010. The range represents the 5th and 95th percentiles respectively
Basically thats because it works on the Listed Salary, not on what people actually get paid – and in our experience theres often a large difference between those two numbers. Still, it gives you something to work with when first looking at whether you can afford to live here, or would be willing to work for these salaries.
You can then click on any of those headings and see a further breakdown. The IT section for example:
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Congratulations to Hubby
Because he found out today that he passed the exams we traveled to Sydney for in November (SABSA – Sherwood Associates Business Security Architecture – gee – that sounds like a whole load of fun eh?) Not only that be the smart alec got 94% on one paper and 98% on the other one – which annoyingly means that he has now scored higher on an exam than I have. Also my high score was on an aromatherapy exam – so not exactly taxing to be honest – but hey – I really can’t have him thinking he’s smarter than me.
Anyway, in honour of his achievement, I am sharing the following Dilbert Cartoon which (in the way that these things happen) just coincides with Hubby having to ask some questions of good Ol’ IBM – cos he’s now their client.
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And why are the IRD being so selective in who they audit and prosecute?
Filed under: Economics, General Budgeting, Jobs & Work, Property & General Investing
As I’m on a rile complaining about laws being applied unevenly and inconsistently – I thought I would mention an article this weekend about the Inland Revenue not collected overdue taxes.
Now Ive made no secret of my dislike of over-taxing people. I’m the first one in the queue to get a legal reduction in tax if at all possible. I maintain that its my money and I should be able to hold to it. Not that I think all taxation is bad – I feel its right to pay a central agency some share of income to cover infrastructure: roads, schools, healthcare, a proper welfare system for people in need – that sort of thing. My issue is with taking more and more tax becuase the government just feels like spending more and more money on things that are vote winners rather than things the country needs.
Anyway – to stop waffling!
Commissioner of Inland Revenue Bob Russell took a swing at the insolvency industry last month, criticising “friendly” liquidators for not delving deeply into the affairs of failed companies. He was reporting to Parliament on the $740 million of taxes lost to firms in liquidation.
Ok – so thats a lot of tax lost by companies going belly-up – but as the article goes on to point out – how the hell has the IRD allowed these companies not to pay the tax? If I am late with my taxes – I get into a lot of trouble – and get fines and penalties.
Of the money owing from liquidation files, 90 per cent is over a year old, confirming what many in the insolvency industry see: the IRD is slow to enforce overdue tax debt.
So this isnt because of the liquidators – its because the IRD isnt chasing late payments. But then there’s this little gem:
Importantly, there is more than $5 billion in arrears from taxpayers not in liquidation or bankruptcy.
So the commissioner is taking pot shots at an industry he claims is costing $740,000,000 in lost taxes while overseeing an IRD that has cost itself $5,000,000,000 by not doing its job properly.
But who are the IRD spending millions investigating and going after? Property Investors and Traders. Who owe a paltry $240,000,000 of that $5 billion. Not that they shouldn’t – but It would be nice if when all us property people get tarred and feathered it was occasionally remembered that we don’t actually the bulk of the owed taxes – we are just the easiest to audit and prosecute – possibly also the most popular to be tarred and feathered.
But also last week, there was a rather interesting post on KiwiBlog, about the Unite union not having paid its PAYE or GST to the Inland Revenue. Now thats a bit embarrassing – but worse was the shitty attitude to the situation displayed my Matt McCarten – the head of the union:
Unite head Matt McCarten confirmed yesterday that the union owed money to the IRD but said he had made choices to pay for union campaigns rather than clear the debt. “I don’t shy away from these decisions, I make the calls.”
So basically – this twit decided off his own back that he had better things to spend the GST and PAYE that his union has collected on behalf of the government, and that he would use that money – that wasn’t his to spend- in order to run political campaigns. Utterly corrupt – and actually illegal. Nit only that – hes been thick enough to admit in the media that hes not paying taxes because hes campaigning with the money instead.
So why would the IRD rather come after me as an individual if I paid my income taxes late (which is money I have earned and have to give them a share of) but doesnt throw the book at Mr McCarten for refusing to hand over taxes he has taken from othe rpeople – ie – its not his own money and never was. Hes stealing it.
Paying employee deductions
Employers must pay deductions to us by each due date. The money deducted does not, at any stage, belong to employers. Under no circumstances should the deductions be used for any other purpose than for payment to Inland Revenue. We will help employers who try to meet their responsibilities but will take action against employers who do not comply with the tax laws.
Failing to pay deductions to Inland Revenue is a serious offence and can result in prosecution. An employer who is convicted may be:
fined up to $50,000 and/or
sent to prison for up to five years.
The name of anyone convicted will also appear in the New Zealand Gazette.
Ha! Still a lesser sentence than giving immigration advise 
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Latest Trade Me salary survey results.
The upshot – you’ll get paid more if you live in Wellington than in Auckland – despite what most people think, and one fo my local towns, Masterton, is at the bottom of the heap for wages.
And IT Architects get paid a lot.
Of course – this is a very blunt instrument to determine what wages people are getting. Most of the jobs in Hubby’s field actually don’t state a salary for example. And there can be a very big difference between the advertised salary – which is there to hook you, and what you actually get paid once all the excuses for it won’t be what was advertised have been thrown around.
Still, it’s an interesting snapshot.
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